What are "third-wave" state economic development efforts? From incentives to industrial policy

"Third-wave" state economic development strategies have been widely acknowl edged to reduce high-stakes incentives and promotions and have shifted emph asis from firm-based programs to broader regional programs. Although the ch ange is well documented, less consensus has emerged about what has taken th eir place. Based on analysis of economic development programs in 16 states competing for high-technology industry, the study documented that the emerg ing third-wave economic development efforts-especially leadership, informat ion, and brokering-are the essential tools by which states can establish th eir industrial policies. These policies are based on extensive strategic pl anning, public-private partnerships, foundations of technology, human resou rces and capital, and the development of strategic industrial clusters. The report concludes that the third wave is a state policy direction that focu ses rather than replaces earlier strategies and that downplays expensive pr ograms by mobilizing many established state programs to build strategic adv antages in industry clusters that will stimulate the entire state economy.